70% Russian Clothing Market is Dependant on Imports

After hitting hard times during the global economic crisis, the Russian clothing retail market is forecast to grow by 3-5% in 2011 and by about 6% per annum during 2012-13, according to a report. 

Growth is spurring investment by foreign brands, which in recent years have come to dominate the market in Russia. Indeed, six of the world’s ten largest apparel retailers—namely C&A Europe, Fast Retailing, Gap, H&M (Hennes & Mauritz), Inditex and Next—have entered the Russian clothing market and found success.  

Women’s Clothing & Men’s Clothing 

Although women’s clothing has the largest share of the market, the most promising sector in terms of growth prospects is that of men’s clothing. Indeed, this sector is forecast to grow at double digit growth rates until at least 2013. Russian men have become more selective in their clothing choices and are demanding higher quality products. Such demand grew when the economic situation in the country improved during 2000-08, and has grown again since.  

Children’s Clothing  

Also promising is the children’s clothing sector. The average amount of money spent on children’s clothing in Russia has grown significantly since 2008, and the market is expected to grow by 10% per annum until 2013.

Sportswear  

However, one of the most promising and fastest growing categories in the Russian clothing market is that of sportswear. Indeed, this is expected to grow at an average growth rate of 16-19% per annum during 2010-17. Recently, Adidas announced that it planned to increase the number of stores within the region during 2011-15.

While some companies are expanding into Russia through franchise agreements, a number of brands are entering the market independently. However, companies planning on entering and expanding in the market without a Russian partner could face serious problems when faced with political obstacles and widespread corruption within the industry’s business practices. 

In the meantime, the Russian market is expected to become more open once the country has joined the World Trade Organization (WTO). With WTO accession, the time is right for international brands to look at the potential of expanding into the Russian market. 

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